Sanofi-aventis Delivers a Solid Performance in Third Quarter 2009
2009 Q3 Change Change at 2009 Change Change at
on a constant 9 months on a constant
reported exchange reported exchange
basis rates basis rates
------- -------- -------- -------- -------- ---------
euro euro
Net sales 7,400m +8.0% +6.0% 21,945m +7.2% +4.1%
----------------- ------- -------- -------- -------- -------- ---------
Adjusted net
income excluding
selected
items(1) 2,229m +15.9% +7.7% 6,675m +20.1% +11.0%
----------------- ------- -------- -------- -------- -------- ---------
Adjusted EPS
excluding
selected
items(1) 1.71 +16.3% +8.2% 5.11 +20.5% +11.6%
----------------- ------- -------- -------- -------- -------- ---------
BRIDGEWATER, N.J., Oct. 30 /PRNewswire-FirstCall/ --In order to
facilitate an understanding of our operational performance, we
comment on our adjusted income statement excluding selected
items(1), a non-GAAP financial measure. The consolidated income
statement for the first 9 months of 2009 is provided in Appendix 6,
as are details of adjustments and selected items. Consolidated net
income for the first 9 months of 2009 was euro 4,056 million,
compared with euro 3,669 million for the first 9 months of 2008.
Consolidated earnings per share for the first 9 months of 2009 was
euro 3.11, versus euro 2.80 for the first 9 months of 2008.
Third-quarter performance(2) buoyed by key growth drivers
-- Good performances from Lovenox(R) (+13.7%) and Lantus(R) (+21.7%)
across all three geographic regions, continuation of strong uptrend in
the presence of Plavix(R) in the United States (+11.3%) and Japan
(+50.3%)
-- Sales growth of 20.9% in emerging markets
-- Strong growth for the Pentacel(R) and Menactra(R) vaccines;
substantial proportion of seasonal and A/H1N1 vaccines sales
anticipated in the fourth quarter
-- OTC sales up 26.3%
-- Launch of Multaq(R) in the United States on target; positive opinion
from the CHMP in Europe, and approval in Canada and Switzerland
-- Impact of competition from generics of Eloxatin(R) in the United
States and Plavix(R) in some European countries more than offset by
growth drivers
Solid quarterly results and 2009 full-year guidance updated
-- 2009 third-quarter adjusted EPS excluding selected items(1) of euro
1.71, +8.2% at constant exchange rates and +16.3% on a reported basis
-- Robust cash flow from operating activities to end September, of euro
6,834 million
-- 2009 guidance, taking account of approximately $500 million sales of
A/H1N1 vaccines expected in the fourth quarter: growth in adjusted EPS
excluding selected items(1) of around 11% at constant exchange rates,
barring major adverse events
Ongoing transformation of sanofi-aventis
-- Business Development: euro 6.2 billion invested to end September 2009
-- Reinforcement of the R&D portfolio: two projects (BSI-201 and
otamixaban) moved into Phase III; two new alliances with Merrimack in
oncology, and Wellstat in diabetes; agreement to acquire Fovea in
ophthalmology
-- Expansion of the OTC business: agreement to acquire Oenobiol in France
Commenting on the Group's 2009 third-quarter performance,
sanofi-aventis Chief Executive Officer Christopher A. Viehbacher
said:
"We pursued our transformation strategy in the third quarter,
reinforcing our platforms for growth and forging ahead with our
policy of R&D alliances and targeted acquisitions. As promised,
we have mobilized substantial resources on the production of A/H1N1
vaccines."
(1) See Appendix 7 for definitions of financial indicators, and
details of selected items;
(2) Growth in net sales is expressed at constant exchange rates
unless otherwise indicated (see Appendix 7 for a definition)
2009 third-quarter and 9-month net sales
Unless otherwise indicated, all sales growth figures in this
press release are stated at constant exchange rates(1).
In the third quarter of 2009, sanofi-aventis (NYSE:SNY) generated net sales of euro 7,400
million, up 8.0% on a reported basis. Exchange rate movements had a
favorable effect of 2.0 percentage points, with the appreciation of
the U.S. dollar (and to a lesser extent the yen) against the euro
more than offsetting the unfavorable effects of some other
currencies. At constant exchange rates, and after taking account of
changes in structure (in particular the consolidation of Zentiva
and Medley), net sales rose by 6.0%. Excluding changes in structure
and at constant exchange rates, third-quarter organic net sales
growth was 3.2%.
Net sales for the first nine months of 2009 were 7.2% higher at
euro 21,945 million. Exchange rate movements, primarily the
appreciation of the U.S. dollar against the euro, had a favorable
effect of 3.1 percentage points. At constant exchange rates, and
after taking account of changes in structure (primarily the
consolidation of Zentiva and Medley in the second quarter, and the
end of commercialization of Copaxone® by sanofi-aventis in
North America effective April 1, 2008), net sales rose by 4.1%.
Excluding changes in structure and at constant exchange rates,
organic net sales growth over the first 9 months of 2009 was
3.5%.
Pharmaceuticals
Third-quarter net sales for the Pharmaceuticals business were up
6.2% at euro 6,354 million. Over the nine months to end September,
Pharmaceuticals net sales rose by 4.0% to euro 19,560
million.
Flagship products(4)
2009 Q3 Change at 2009 Change at
net sales constant 9-month constant
exchange net sales exchange
rates rates
Millions of euros --------- --------- --------- ---------
Lantus(R) 778 +21.7% 2,317 +24.9%
----------------- ----- ----- ----- -----
Lovenox(R) 747 +13.7% 2,289 +9.1%
----------------- ----- ----- ----- -----
Plavix(R) 664 +4.1% 2,053 +4.1%
----------------- ----- ----- ----- -----
Taxotere(R) 526 +1.4% 1,644 +6.8%
----------------- ----- ----- ----- -----
Aprovel(R) 299 +1.7% 919 +3.9%
----------------- ----- ----- ----- -----
Eloxatin(R) 193 -44.3% 890 -18.4%
----------------- ----- ----- ----- -----
Apidra(R) 34 +32.0% 100 +42.6%
----------------- ----- ----- ----- -----
Multaq(R) 13 13
----------------- ----- ----- ----- -----
The strong pace of growth for Lantus®, the world's leading
insulin brand, continued in the third quarter of 2009; net sales
were up 21.7% at euro 778 million, boosted by the SoloSTAR®
injection pen. The product reported strong growth across all three
regions: 21.3% in the United States (to euro 478 million), 11.4% in
Europe (to euro 189 million) and 48.6% in the Other Countries
region (to euro 111 million). Taking into account the performance
over the first 9 months of the year (net sales of euro 2,317
million, a rise of 24.9%), Lantus® has become the Group's
best-selling product in terms of consolidated net sales.
ClikSTAR®, a new reusable pen for the administration of
Lantus® and/or Apidra®, is now available in some European
Union countries and in Canada. With the launch of ClikSTAR® to
complement SoloSTAR®, sanofi-aventis now offers a full range of
injection pens that make it easier for patients to use insulin.
ClikSTAR® is currently being evaluated by the United States
Food and Drug Administration (FDA).
(4) See Appendix 2 for a geographical split of consolidated net
sales by product.
Various results from studies of Lantus® were presented at
the annual meeting of the European Association for the Study of
Diabetes (EASD) in September 2009, in particular results from a
comparative study that once again demonstrated the efficacy of the
24-hour long-acting basal insulin Lantus® administered by daily
injection, versus insulin detemir administered by twice-daily
injection.
In October 2009, the FDA approved the inclusion in the
Lantus® labeling of favorable results from a 5year study
comparing the effect of Lantus® with that of NPH insulin on the
progression of retinopathy in patients with type 2 diabetes.
The rapid-acting insulin analog Apidra® recorded a 32.0%
rise in third-quarter net sales to euro 34 million. Net sales of
the product for the nine months to end September were up 42.6% at
euro 100 million.
Third-quarter net sales of Lovenox®, the leading low
molecular weight heparin on the market, rose by 13.7% to euro 747
million, driven by strong growth in Europe (+23% at euro 220
million) and in the Other Countries region (+19.2% at euro 85
million). Over the nine months to end September, net sales of the
product advanced by 9.1% to euro 2,289 million. No biosimilar of
Lovenox® has been approved in the United States to date.
Taxotere® reported third-quarter net sales of euro 526
million, up 1.4%. Demand for the product remains strong, but sales
growth was impacted by fluctuations in inventory levels between the
third quarter of 2009 and the third quarter of 2008. In Europe, the
Committee for Medicinal Products for Human Use (CHMP) issued a
positive opinion on a new single vial formulation of Taxotere®.
Over the nine months to end September, the product posted a 6.8%
rise in net sales, to euro 1,644 million. In October,
sanofi-aventis submitted a request for marketing approval in Europe
for Taxotere® as an adjuvant treatment for early stage breast
cancer without lymph node Involvement.
Net sales of Eloxatin® in the third quarter were euro 193
million, down 44.3%, reflecting the entry of a number of generics
into the U.S. market during August 2009, which negatively impacted
the product's U.S. sales by 53.0% to euro 122 million. In Europe,
competition from generics is ongoing, with net sales down 55.1% at
euro 22 million. In the Other Countries region however, the product
achieved growth of 16.7% (net sales: euro 49 million). On September
10, 2009, the U.S. Court of Appeals for the Federal Circuit
reversed the summary judgment against sanofi-aventis delivered by
the District Court for the District of New Jersey, and referred the
case back to the District Court. In light of this judgment,
sanofi-aventis has petitioned the District Court for a preliminary
injunction to suspend the sale of generics in the United States
pending settlement of the patent litigation.
Marketing of Multaq®, the first anti-arrhythmic with a
clinical benefit in reducing cardiovascular hospitalization in
patients with atrial fibrillation to be approved, began in the
United States on July 28. The promotional material was approved by
the FDA Division of Drug Marketing, Advertising and Communication
(DDMAC) in September, and is now available for use by our sales
forces. Initial indications are very encouraging, in terms both of
the level of new prescriptions and the response of prescribers to
the product. After eight weeks on the market, over 19,000
prescriptions have been written by around 4,500 physicians. Some
regional insurance plans have already granted reimbursement, and
Managed Care coverage is set to expand over the next three months
thanks to the solid pharmaco-economic case for the product.
Third-quarter net sales of Multaq® amounted to euro 13
million.
On September 25, 2009, sanofi-aventis announced that the CHMP
had issued a positive opinion recommending the granting of
marketing authorization for Multaq® in the European Union. This
positive opinion now needs to be ratified by the European
Commission. In addition, Multaq® was authorized in Switzerland
on September 25, and has been available in Canada since September
28.
Worldwide presence(1) of Plavix®/Iscover®
Third-quarter sales of Plavix® rose by 6.3%, driven by good
performances in the United States (up 11.3%, net sales consolidated
by Bristol Myers Squibb) and the Other Countries region (up 15.6%).
In Europe, the product is facing competition from generics using
clopidogrel with a different salt from that used by Plavix®
(clopidogrel hydrogen sulphate), especially in the United Kingdom
and Germany, and sales fell by 7.8%. In Germany, the market share
of Plavix®/Iscover® by volume was around 55% (IMS
Pharmatrend, week of September 21, 2009), with alternative salts of
clopidogrel granted an extension to their indication during the
quarter.
In Japan, Plavix® performed particularly well in the
quarter, with net sales up 50.3% at euro 82 million.
Sales of Plavix® for the nine months to end September rose
by 8.1% to euro 5,168 million, with Japanese sales up 64.2% at euro
237 million.
In Europe, various generics of Plavix® obtained marketing
authorization during the third quarter, in particular alternative
salts of clopidogrel such as besylate. In some countries,
additional time is required for pricing and reimbursement
procedures before these generics can be marketed. In France,
sanofi-aventis responded to the marketing authorizations granted by
the European and French healthcare authorities for alternative
salts of clopidogrel by deciding in early October to make an
identical copy of Plavix® available in France, the generic
Clopidogrel Winthrop® (clopidogrel hydrogen sulphate).
Worldwide presence of Plavix®/Iscover®: geographic split
Millions of euros 2009 Change at 2009 Change at
Q3 constant 9 months constant
exchange exchange
rates rates
----------------- ------ --------- -------- ---------
Europe 404 -7.8% 1,293 -3.6%
----------------- ------ --------- -------- ---------
United States 997 +11.3% 3,034 +13.4%
----------------- ------ --------- -------- ---------
Other Countries 285 +15.6% 841 +13.3%
----------------- ------ --------- -------- ---------
TOTAL 1,686 +6.3% 5,168 +8.1%
----------------- ------ --------- -------- ---------
Worldwide presence(1) of Aprovel®/Avapro®/Karvea®
Net sales of Aprovel® held steady in the third quarter, in a
competitive environment. In Europe, where the product is facing
competition from generics in monotherapy in Spain and Portugal,
sales rose by 0.4%. Over the nine months to end September, the
product reported sales growth of 1.2%.
Worldwide presence of Aprovel®/Avapro®/Karvea®: geographic split
Millions of euros 2009 Change at 2009 Change at
Q3 constant 9 months constant
exchange exchange
rates rates
----------------- ------ --------- -------- ---------
Europe 239 0.4% 737 +1.3%
----------------- ------ --------- -------- ---------
United States 132 -1.6% 399 -1.4%
----------------- ------ --------- -------- ---------
Other Countries 123 +0.8% 373 +3.7%
----------------- ------ --------- -------- ---------
TOTAL 494 +0.0% 1,509 +1.2%
----------------- ------ --------- -------- ---------
(1) See Appendix 7 for definitions of financial indicators
Other Pharmaceutical Products
In the United States, net sales of the hypnotic Ambien® CR
were flat in the third quarter (euro 124 million, down 0.6%), but
grew by 0.5% over the first nine months of 2009 to euro 381
million. In Japan, third-quarter net sales of Myslee®, the
leading hypnotic on the market, were up 12.6% at euro 46 million.
Over the first nine months of 2009, net sales of the product were
17.6% higher at euro 139 million.
Net sales of Allegra® were up 5.3% in the third quarter at
euro 153 million, driven by another good performance in Japan
(+13.3%). Over the first nine months of 2009, net sales of the
product increased by 2.2% at euro 591 million.
Copaxone® posted third-quarter net sales of euro 118
million, a rise of 20.0%. The end of commercialization of the
product by sanofi-aventis in North America effective April 1, 2008
led to a 31.7% decline in consolidated net sales of Copaxone®
over the first nine months of 2009.
OTC
Third-quarter net sales for the OTC business grew 26.3% at euro
356 million, reflecting healthy organic growth (7.4% on a constant
structure basis and at constant exchange rates) plus the
consolidation of Symbion and of Zentiva's OTC activities.
The 6 flagship brands (Doliprane®, Essentiale®,
Maalox®, No-Spa®, Enterogermina®, Lactacyd®)
achieved growth of 19.6%, driven by Doliprane® and
Essentiale®. OTC net sales for the nine months 2009 were euro
996 million, a rise of 19.6% (or 4.5% on a constant structure basis
and at constant exchange rates).
On October 30, the Group announced that it has signed an
agreement to acquire 100% of the shares of Oenobiol, the French
leader in nutritional supplements for health and beauty. In 2008,
Oenobiol had a turnover of 58 million euros, of which 85% generated
in France.
Generics
The Generics business posted third-quarter net sales of euro 302
million, a rise of 273.3%. This rate reflects strong organic growth
(16.3% on a constant structure basis and at constant exchange
rates), plus the consolidation of Zentiva, Kendrick and Medley from
the second quarter. Implementation of the new generics platform in
Eastern Europe, combining the operations of Zentiva and
sanofi-aventis, should be completed by the end of the year. Over
the first nine months of 2009, net sales for the Generics business
were euro 679 million, a rise of 177.5% (or 12.1% on a constant
structure basis and at constant exchange rates).
Animal Health
The acquisition of Merial was completed on September 18. Given
the option of a future combination between Merial and
Intervet/Schering Plough (subject to completion of the merger
between Merck and Schering-Plough), sanofi-aventis has decided in
light of the relevant accounting standards (IFRS 5) to recognize
the contribution from Merial on a separate line, "Net income from
the Merial business".
Merial's third-quarter sales were flat, falling by 0.5% (or by
4% on a reported basis) to $626 million. Sales of Frontline®
and other fipronil products held steady at $248 million, despite
increased competition and the impact of a decline in household
consumption on the companion animal healthcare market.
For the first nine months of 2009, Merial reported net sales of
$1,961 million, down 0.5% (or down 7.4% on a reported basis). Net
sales of Frontline® and other fipronil products were down 1.9%
at $834 million. Net sales of vaccines rose by 4.5% to $552 million
over the 9-month period, driven by robust growth of 9.1% in
companion animal vaccines.
Human Vaccines business
Third-quarter consolidated net sales for the Human Vaccines
business rose by 4.8% to euro 1,046 million (representing 14.1% of
the Group's total net sales), driven by the strong performance of
Pentacel®, Pentaxim® and Menactra®, as well as the
first H1N1 shipments.
Net sales of Pentacel® (the first 5-in-1 pediatric
combination vaccine licensed in the United States in June 2008
against diphtheria, tetanus, pertussis, polio and Haemophilus
influenzae type b) reached euro 82 million in the third quarter,
versus euro 25 million in the third quarter of 2008. Net Sales of
Pentaxim® (another 5-in-1 pediatric combo vaccine, which
protects against diphtheria, tetanus, pertussis, polio and
haemophilus influenzae type b) increased 62.5% to euro 39
million.
Net sales of Menactra® (quadrivalent meningococcal
meningitis vaccine) advanced by 19.7% to euro 184 million.
Net sales of influenza vaccines for the quarter were 3.2% lower
than last year at euro 378 million. In 2009, the low-yielding B
strain will result in greater seasonal influenza sales during the
fourth quarter of the year versus fourth quarter 2008. In 2009
Sanofi Pasteur should supply over 180 million doses of trivalent
seasonal influenza vaccines, representing an estimated 40% of the
northern hemisphere and 75% of the southern hemisphere global
demand.
In September, Sanofi Pasteur began H1N1 shipments in the United
States, third-quarter H1N1 sales amounted to euro 78 million. The
bulk of the H1N1 shipments should occur during the fourth quarter
of 2009 and early 2010. Sales of H1N1 vaccines should be around
$500 million in the fourth quarter of the year.
During the third quarter, Sanofi Pasteur completed the
acquisition of ShanH, a subsidiary of Merieux Alliance that owns a
majority stake in Shantha Biotechnics, an Indian vaccine
manufacturer. Shantha was recently awarded 2010-2012 contracts from
a United Nations agency worth a total of $340 million for the
supply of SHAN5(TM) (a pediatric combination vaccine against
diphtheria, pertussis, tetanus, Haemophilus influenzae type B
infections and hepatitis B). These contracts demonstrate Shantha's
ability to meet high-quality affordable vaccines needs in
international markets.
Consolidated net sales for the Human Vaccines business for the
first nine months of 2009 were up 4.2% at euro 2,385 million.
Excluding pandemic influenza vaccine contracts (A/H1N1 and H5N1),
sales growth was 6.0%. Over the first nine months of 2009,
sanofi-aventis recognized net sales of pandemic influenza vaccines
amounting to euro 104 million, compared with euro 126 million for
the comparable period of 2008.
Millions of euros 2009 Q3 Change at 2009 Change at
net sales constant 9-month constant
exchange net sales exchange
rates rates
----------------- --------- --------- --------- ---------
Polio/Pertussis/Hib
Vaccines (incl.
Pentacel(R) and
Pentaxim(R) 229 +12.4% 724 +24.6%
----------------- --------- --------- --------- ---------
Influenza Vaccines*
(incl. Vaxigrip(R)
and Fluzone(R) 378 -3.2%* 498 -16.4%*
----------------- --------- --------- --------- ---------
Meningitis/Pneumonia
Vaccines (incl.
Menactra(R) 205 +22.4% 464 +10.8%
----------------- --------- --------- --------- ---------
Adult Booster
Vaccines (incl.
Adacel(R) 109 -6.4% 311 -7.8%
----------------- --------- --------- --------- ---------
Travel and Other
Endemics Vaccines 72 -11.4% 237 -2.1%
----------------- --------- --------- --------- ---------
Other Vaccines 53 +40.0% 151 +35.9%
----------------- --------- --------- --------- ---------
TOTAL 1,046 +4.8% 2,385 +4.2%
----------------- --------- --------- --------- ---------
* Seasonal and pandemic influenza vaccines
Third-quarter net sales at Sanofi Pasteur MSD (not consolidated
by sanofi-aventis), the joint venture with Merck & Co in
Europe, fell by 6.0% on a reported basis to euro 350 million. Sales
of Gardasil®, a vaccine for the prevention of human
papillomavirus infections (a major cause of cervical cancer) were
down 47.1% on a reported basis at euro 76 million. This decrease
was due to extensive catch-up campaigns in the prior year.
Excluding Gardasil®, sales of the rest of the portfolio rose by
20.0% on a reported basis. Sales at Sanofi Pasteur MSD for the
first nine months of 2009 were euro 837 million, down 9.4% on a
reported basis.
Net sales by geographic region
Millions of euros 2009 Q3 Change at 2009 Change at
net sales constant 9-month constant
exchange net sales exchange
rates rates
----------------- --------- --------- --------- ---------
Europe 3,050 +6.8% 9,077 +3.4%
----------------- --------- --------- --------- ---------
of which Eastern
Europe and Turkey 606 +42.8% 1,655 +32.3%
----------------- --------- --------- --------- ---------
United States 2,441 +1.1% 7,174 +0.3%
----------------- --------- --------- --------- ---------
Other Countries 1,909 +11.1% 5,694 +10.0%
----------------- --------- --------- --------- ---------
of which Japan 400 +4.2% 1,352 +8.4%
----------------- --------- --------- --------- ---------
of which Asia
(excluding the
Pacific region) 418 +8.2% 1,231 +10.6%
----------------- --------- --------- --------- ---------
of which Latin
America 494 +17.9% 1,331 +10.0%
----------------- --------- --------- --------- ---------
of which Africa 187 +6.2% 565 +5.2%
----------------- --------- --------- --------- ---------
of which Middle
East 150 +14.6% 462 +12.1%
----------------- --------- --------- --------- ---------
TOTAL 7,400 +6.0% 21,945 +4.1%
----------------- --------- --------- --------- ---------
Third-quarter net sales in Europe rose by 6.8%, driven by
Eastern Europe (+39.6%) which since the start of April has included
Zentiva. Sales in Western Europe rose by 1.8% over the period,
despite ongoing competition from generics of Eloxatin® and
increased competition from generics of Plavix®. Over the first
nine months of 2009, net sales in Europe were up 3.4%.
The United States reported quarterly growth of 1.1% despite
competition from generics of Eloxatin® in August. The main
growth drivers during the period were again Lantus® (+21.3%)
and Lovenox® (+8%). Over the first nine months of 2009, U.S.
net sales were virtually unchanged (+0.3%), reflecting the impact
of the end of commercialization of Copaxone® by sanofi-aventis
effective April 1, 2008.
In the Other Countries region, third-quarter net sales rose by
11.1%, with Latin America, the Middle East and Asia-Pacific all
posting double-digit growth. Net sales in China advanced by 38.8%
to euro 149 million. In Japan, net sales rose by 4.2% to euro 400
million, compared with a 2008 third-quarter figure that benefited
from sales of active ingredients of Aprovel® to our local
partners. Japanese sales are being boosted by the ongoing success
of Plavix®, and by good growth for Myslee® and
Allegra®. Sales in Latin America are being driven by Brazil,
thanks to healthy organic growth and the acquisition of Medley.
Over the first nine months of 2009, net sales growth in the Other
Countries region was 10.0%. Over the same period, net sales grew by
8.4% in Japan (to euro 1,352 million) and by 36.5% in China (to
euro 408 million).
Third-quarter net sales in emerging markets(5) were euro 1,888
million, an increase of 20.9% (or 6.7% on a constant structure
basis and at constant exchange rates). Emerging markets net sales
for the first nine months of the year rose by 16.4% (or 7.0% on a
constant structure basis and at constant exchange rates) to euro
5,358 million, representing 24.4% of the Group's total net
sales.
(5) World excluding North America, Western Europe (France,
Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta,
Belgium, Portugal, Netherlands, Austria, Switzerland, Ireland,
Finland, Norway, Iceland, Denmark), Japan, Australia and New
Zealand.
Solid results, built on sales growth and ongoing cost control 2009 third-quarter financial results Adjusted income statement excluding selected items(1)
Sanofi-aventis generated third-quarter net sales of euro 7,400
million, an increase of 8.0% on a reported basis. "Other revenues"
rose by 19.2% due to a good performance from Plavix® in the
United States and a favorable dollar effect.
Gross profit came to euro 5,744 million, a rise of 6.9%, or of
3.7% at constant exchange rates. The ratio of cost of sales to net
sales increased by 1.2 percentage points to 27.4% due to a slightly
less favorable product mix, a rise in the cost of heparin raw
materials, and the impact of generics during the period (arrival of
Eloxatin® generics in the United States, and increased generic
competition for Plavix® in Europe).
Research and development expenses were up 1.8% at euro 1,109
million, but down 0.6% at constant exchange rates, reflecting a
selective approach to R&D projects and the impact of cost
savings in pharmaceuticals R&D, increased R&D spend in
vaccines, and the development costs of acquired companies. Overall,
the ratio of R&D expenses to net sales was 15.0%, 0.9
percentage point lower than in the comparable period of 2008.
Selling and general expenses increased by 3.4% (or 1.2% at
constant exchange rates) to euro 1,707 million, and include the
launch costs for Multaq® in the United States. The ratio of
selling and general expenses to net sales fell by 1 percentage
point to 23.1%, reflecting the ongoing adaptation program.
Other current operating income, net of expenses totaled euro 86
million, versus euro 49 million in the third quarter of 2008. The
year-on-year change mainly reflects an increase in the royalty
collected by sanofi-aventis on sales of Copaxone® in North
America.
Operating income - current(1) advanced by 11.9% to euro 2,955
million. At constant exchange rates, growth was 4.5%. The ratio of
operating income - current(1) to net sales improved by 1.4 points
to 39.9%.
Net financial expenses were euro 69 million, against euro 60
million in the comparable period of 2008. The acquisition of 100%
of Merial for euro 2.8 billion was completed on September 18,
2009.
The effective tax rate was 0.6 of a point lower at 29%, in line
with the 2008 full-year effective tax rate.
The share of profits from associates (excluding Merial) was
24.3% higher at euro 235 million, with the share of after-tax
profits from the territories managed by BMS under the Plavix®
and Avapro® alliance up 31.6% at euro 204 million thanks to the
performance of Plavix® in the United States and a favorable
dollar effect. The contribution from Sanofi Pasteur MSD was flat
year on year.
Net income from the Merial business was euro 59 million; this
figure consists of 100% of the net income of Merial from September
18, 2009 (when sanofi-aventis acquired a 100% interest) and 50%
prior to that date.
Minority interests were 2.7% higher at euro 114 million. The
share of pre-tax profits paid to BMS from territories managed by
sanofi-aventis was euro 110 million (versus euro 104 million in the
third quarter of 2008).
Adjusted net income excluding selected items(1) was euro 2,229
million, up 15.9% (7.7% at constant exchange rates). The ratio of
adjusted net income excluding selected items(1) to net sales
improved by 2 points to 30.1%.
Adjusted earnings per share (EPS) excluding selected items(1)
was euro 1.71, an increase of 16.3% (8.2% at constant exchange
rates) on the 2008 third-quarter figure of euro 1.47.
(1) See Appendix 7 for definitions of financial indicators, and
page 10 for details of selected items
2009 9-month financial results Adjusted income statement excluding selected items(1)
In the first nine months of 2009, sanofi-aventis generated net
sales of euro 21,945 million, up 7.2% on a reported basis. "Other
revenues" rose by 21.9% thanks to a good performance from
Plavix® in the United States and a favorable dollar
effect.
Gross profit was euro 17,392 million, a rise of 9.0% (4.3% at
constant exchange rates). The ratio of cost of sales to net sales
improved by 0.8 of a point to 25.6% due to positive currency
effects, the end of commercialization of Copaxone® by
sanofi-aventis in North America, and a favorable product mix.
Research and development expenses rose by 3.1% to euro 3,369
million, but fell by 0.1% at constant exchange rates. These figures
include euro 54 million of provisions relating to the
discontinuation of various projects following the portfolio review
completed at the end of the first quarter.
Selling and general expenses were 2.1% higher at euro 5,334
million, but 1.0% lower at constant exchange rates. The ratio of
selling and general expenses to net sales fell by 1.2 percentage
points to 24.3%, reflecting the cost-measures implemented by the
Group.
Other current operating income, net of expenses totaled euro 366
million, compared with euro 227 million for the first nine months
of 2008; these figures reflect the payment by Teva of a royalty
equal to 25% of North American sales of Copaxone® from the
second quarter of 2008.
Operating income - current(1)was 17.6% higher at euro 8,899
million. At constant exchange rates, the growth rate was 9.5%. The
ratio of operating income - current(1) to net sales improved by 3.7
points to 40.6%.
The effective tax rate was 29%, in line with the 2009 full-year
effective tax rate.
The share of profits from associates (excluding Merial) was
22.2% higher at euro 644 million, with the share of after-tax
profits from the territories managed by BMS under the Plavix®
and Avapro® alliance up 34.1% at euro 598 million thanks to the
performance of Plavix® in the United States and a favorable
dollar effect. The contribution from Sanofi Pasteur increased year
on year.
The contribution of Merial to net income was euro 189 million;
this figure consists of 100% of the net income of Merial from
September 18, 2009 (when sanofi-aventis acquired a 100% interest)
and 50% prior to that date. Merial generated an operating margin of
32.1% in the first nine months of 2009, slightly lower than the
level recorded in the comparable period of 2008.
Minority interests increased by 4.5% to euro 346 million. The
share of pre-tax profits paid to BMS from territories managed by
sanofi-aventis was euro 329 million (versus euro 316 million for
the first nine months of 2008).
Adjusted net income excluding selected items(1)was euro 6,675
million, up 20.1% (11.0% at constant exchange rates). The ratio of
adjusted net income excluding selected items(1) to net sales
improved by 3.3 points to 30.4%.
Adjusted earnings per share (EPS) excluding selected items(1)
was euro 5.11, an increase of 20.5% (11.6% at constant exchange
rates) relative to the first nine months of 2008 (euro 4.24).
(1) See Appendix 7 for definitions of financial indicators and
page 10 for details of selected items.
Selected items (see Appendix 6)
In the third quarter of 2009, selected items comprised euro 28
million of restructuring provisions (net of tax) associated with
the Group's adaptation program. Selected items in the third quarter
of 2008 represented a net after-tax expense of euro 35
million.
Selected items for the first nine months of 2009 represented a
net after-tax expense of euro 636 million (compared with a net
after-tax expense of euro 203 million for the comparable period of
2008), and comprised:
-- euro 949 million of restructuring costs associated with the Group's
adaptation program;
-- euro 20 million of impairment losses arising from the decision to
discontinue development of TroVax®;
-- the euro 333 million tax effect arising on the selected items
described above.
Adjustments to the consolidated financial statements to reflect
the application of purchase accounting to acquisitions, primarily
that of Aventis (see Appendix 6)
The material effects of the application of purchase accounting
to acquisitions, primarily that of Aventis, on the consolidated
income statement were as follows:
-- A charge of euro 19 million in the second quarter arising from the
workdown of inventories of Zentiva and other companies acquired during
the period remeasured at fair value.
-- An amortization charge of euro 2,522 million against intangible
assets, of which euro 814 million was booked in the third quarter.
-- Impairment losses of euro 352 million, of which euro 344 million was
booked in the third quarter, mainly in respect of Benzaclin®,
Nasacort® and Actonel® in light of changes in the competitive
environment and the dates of approval for generics. In the second
quarter, an impairment loss of euro 8 million was taken against the
Di-Antalvic asset.
-- Deferred taxes of euro 968 million, of which euro 391 million was
booked in the third quarter. These deferred taxes were generated by
the amortization charged against intangible assets, the workdown of
inventories of acquired companies, and the impairment losses.
-- In "Share of profits/losses from associates", a reversal of euro 58
million, of which euro 15 million was booked in the third quarter,
mainly relating to the amortization of intangible assets (net of tax);
of these figures, the amounts relating to Merial were euro 37 million
for the first nine months of 2009 and euro 9 million for the third
quarter.
These adjustments have no cash impact on the Group.
Net debt
Over the first nine months of 2009, sanofi-aventis generated
substantial cash flow of euro 6,834 million, which provided finance
for capital expenditure of euro 1,038 million and the dividend
payout of euro 2,872 million, plus partial funding for the
acquisitions and alliances carried out during the period. Spending
on acquisitions totaled euro 5,963 million, and related primarily
to Merial, Zentiva, Medley, Shantha and BiPar Sciences, while
spending on alliances was euro 223 million. Net debt at end
September was euro 5,042 million (debt of euro 7,363 million, net
of cash of euro 2,321 million), compared with euro 1,780 million as
of December 31, 2008.
Research and Development
The third quarter was a particularly active one for the Group's
policy of targeted alliances and acquisitions. In parallel,
initiatives designed to transform the Group's Research and
Development operations continued to make progress.
The R&D portfolio was boosted by an exclusive worldwide
license and collaboration agreement with the U.S. biotechnology
company Merrimack relating to MM-121, currently in Phase I for
solid malignancies. MM-121 is a first-in-class fully human
monoclonal antibody targeting cancer cells that over-express or
amplify the ErbB3 receptor. A similar type of agreement was signed
with Wellstat Therapeutics for PN2034, a novel oral first-in-class
insulin sensitizer for the treatment of type 2 diabetes. As a
sensitizer, PN2034 is expected to normalize and therefore enhance
insulin action in the liver of diabetic patients. The compound is
currently in Phase II clinical testing.
An agreement was also signed with a view to the acquisition of
Fovea, a French biopharmaceutical company specializing in
ophthalmology. Fovea has an innovative technological platform, a
number of ongoing research programs in the treatment of retinal
disorders, and a portfolio of three products in clinical
development:
-- FOV 1101, a fixed dose combination of prednisolone and cyclosporine in
eye-drop form, currently in Phase II for the treatment of persistent
allergic conjunctivitis;
-- FOV 2302, a recombinant peptide plasma kallikrein inhibitor, in Phase
I for the treatment by intravitreal injection of Retinal Vein
Occlusion induced macular oedema;
-- FOV 2304, a potent antagonist of bradykinin B1 receptors in eye-drop
form, scheduled to enter Phase I by end 2009 for the treatment of
diabetic macular oedema.
In October 2009, sanofi-aventis and Micromet announced a
collaboration and worldwide license agreement for the development
of a BiTE® antibody, directed against an antigen present on the
surface of tumor cells. BiTE® antibodies are novel therapeutic
antibodies that activate T-cells so that they will identify and
destroy tumor cells.
(Clearance for the agreements described above is currently being
sought from the anti-trust authorities)
Apart from these external additions to the portfolio, the principal
developments in the R&D portfolio since the last update on
July 29, 2009 are described below:
-- Two new Phase III programs have been launched:
-- BSI-201, a PARP inhibitor developed by Bi-Par Sciences (a
company recently acquired by sanofi-aventis) entered Phase
III in July. This pivotal study, set to include 420 patients at
100 sites, will evaluate the product in association with
chemotherapy in women with metastatic triple negative breast
cancer, i.e. with a tumor that expresses neither the estrogen
receptor nor the progesterone receptor and does not over-express
the HER2 receptor.
-- After good Phase II results, otamixaban (injectable, selective
direct inhibitor of coagulation factor Xa) is due to enter Phase
III in the first quarter of 2010. Results from the SEPIA-
ACS1/TIMI-42 Phase II study, presented to the European Society of
Cardiology (ESC) on August 30, showed a clinically significant
reduction in complications in the invasive management of acute
coronary syndromes, with a similar safety profile to that of
existing treatments.
-- Two projects entered Phase II:
-- the purified vero rabies vaccine, an improved version of the
Verorab® vaccine, which entered Phase II;
-- SAR 164877, an anti-NGF monoclonal antibody, developed for pain
relief in collaboration with Regeneron.
-- Two new candidates entered Phase I:
-- AVE 0010/Lantus® combination in the treatment of type 2 diabetes;
-- SAR 103168 (multikinase inhibitor), developed in acute myeloid
leukemia.
In addition to the Phase II results for otamixaban, results from two other
studies have recently been presented to the scientific community:
-- Results from the CURRENT-OASIS 7 study were presented to the ESC on
August 30. This large-scale trial (25,000 patients) was designed to
evaluate the efficacy and safety of a high dose Plavix® regimen versus
the approved dosage for patients requiring angioplasty. This major
study provided new information about the benefits of a higher loading
dose for this type of patient.
-- Positive Phase II results for teriflunomide, a novel orally available
immunomodulatory therapy used jointly with interferon in the treatment
of multiple sclerosis, were presented at the Congress of the European
Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS)
on September 11. Teriflunomide is currently in Phase III as a
monotherapy in the treatment of recurring multiple sclerosis.
A number of opinions on filings for approval were received from healthcare
authorities during the period:
-- Sculptra(R) was approved by the FDA at end July 2009 in a new
indication: aesthetic dermatology.
-- In September 2009, sanofi-aventis announced that it had received a
Complete Response Letter from the FDA regarding eplivanserin
(Ciltyri(R)). Eplivanserin was being reviewed as a potential treatment
for patients with chronic insomnia characterized by difficulties with
sleep maintenance. In the letter, the FDA requested additional
information regarding benefit-risk. Sanofi-aventis requested a
meeting, scheduled for the fourth quarter, to discuss what additional
steps and data would be necessary for FDA approval.
-- In September 2009, the CHMP issued a positive opinion recommending the
granting of marketing authorization for Multaq(R) in the European
Union for clinically stable adult patients with a history and/or a
current episode of non-permanent atrial fibrillation (AF), to prevent
recurrence of AF or to lower ventricular rate. In the Summary of
Positive Opinion, the CHMP noted that Multaq(R) had been shown, in
addition to its rhythm and rate controlling properties, to decrease
the risk of atrial fibrillation-related hospitalizations. Multaq(R)
has also been approved in Canada and Switzerland.
-- ClikSTAR(R), a new rechargeable insulin pen designed to administer
Lantus(R) and/or Apidra(R), was approved in Europe and Canada, and is
already available in some countries.
-- The monovalent A/H1N1 pandemic influenza vaccine was licensed in the
United States in September 2009.
-- In October 2009, the FDA approved the inclusion in the Lantus(R)
labeling of favorable results from a 5year study comparing the
effect of Lantus(R) with that of NPH insulin on the progression of
retinopathy in patients with type 2 diabetes.
-- Also in October 2009, the FDA approved Elitek(R) for the management
of hyperuricemia in adults suffering from leukemia, lymphoma or
solid malignancies who are receiving anti-cancer treatments that
carry a risk of inducing tumor lysis syndrome and hence hyperuricemia.
In October, this product was approved in Japan under the name
Rasuritek(R).
-- A submission for approval of Plavix® in the prevention of major
vascular events in patients with atrial fibrillation who cannot take
oral anticoagulant medication (based on the results of the ACTIVE-A
study) was filed in Europe in October. A similar submission will be
filed in the United States by end 2009.
2009 Guidance
Based on the good performance achieved over the first nine
months of the year, and the expected contribution from
approximately $500 million of H1N1 vaccine sales in the fourth
quarter, sanofi-aventis has updated its guidance for 2009 full-year
growth in adjusted EPS excluding selected items(1) of around 11%,
calculated at constant exchange rates and barring major adverse
events.
In light of the first-time application of IFRS 8 (Operating
Segments), sanofi-aventis has reviewed its segment structure and
financial indicators, and now presents disclosures on the following
segments in the notes to the financial statements: Pharmaceuticals,
Vaccines, and Other Activities. This information is given in the
2009 Half-Year Financial Report. From 2010, financial
communications issued by sanofi-aventis will comment on the new
indicator disclosed for segment reporting purposes ("Business net
income - Pharmaceuticals, Vaccines and Other").
Use of this indicator is not expected to give rise to any
material difference as compared with the performance measure
currently used by sanofi-aventis. Growth in 2009 net income
measured using this new indicator will therefore be close to growth
in "Adjusted net income excluding selected items".
Forward-Looking Statements
This press release contains forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995, as
amended. Forward-looking statements are statements that are not
historical facts. These statements include product development,
product potential projections and estimates and their underlying
assumptions, statements regarding plans, objectives, intentions and
expectations with respect to future events, operations, products
and services, and statements regarding future performance.
Forward-looking statements are generally identified by the words
"expects," "anticipates," "believes," "intends," "estimates,"
"plans" and similar expressions. Although sanofi-aventis'
management believes that the expectations reflected in such
forward-looking statements are reasonable, investors are cautioned
that forward-looking information and statements are subject to
various risks and uncertainties, many of which are difficult to
predict and generally beyond the control of sanofi-aventis, that
could cause actual results and developments to differ materially
from those expressed in, or implied or projected by, the
forward-looking information and statements. These risks and
uncertainties include among other things, the uncertainties
inherent in research and development, future clinical data and
analysis, including post marketing, decisions by regulatory
authorities, such as the FDA or the EMEA, regarding whether and
when to approve any drug, device or biological application that may
be filed for any such product candidates as well as their decisions
regarding labeling and other matters that could affect the
availability or commercial potential of such products candidates,
the absence of guarantee that the products candidates if approved
will be commercially successful, the future approval and commercial
success of therapeutic alternatives, the Group's ability to benefit
from external growth opportunities as well as those discussed or
identified in the public filings with the SEC and the AMF made by
sanofi-aventis, including those listed under "Risk Factors" and
"Cautionary Statement Regarding Forward-Looking Statements" in
sanofi-aventis' annual report on Form 20-F for the year ended
December 31, 2008. Other than as required by applicable law,
sanofi-aventis does not undertake any obligation to update or
revise any forward-looking information or statements.
U.S. Contact: Jack Cox, 908-981-5280, jack.cox@sanofi-aventis.com (1) See Appendix 7 for definitions of financial indicators. Appendices List of appendices Appendix 1: 2009 third-quarter and 9-month consolidated net sales by product Appendix 2: 2009 third-quarter and 9-month consolidated net sales by geographic region and product Appendix 3: Consolidated net sales by business segment Appendix 4: 2009 third-quarter and 9-month net sales by animal health product Appendix 5: 2009 third-quarter and 9-month adjusted income statements excluding selected items Appendix 6: Reconciliation of adjusted income statement excluding selected items to adjusted income statement and consolidated income statement Appendix 7: Definitions of non-GAAP financial indicators Appendix 1: 2009 third-quarter and 9-month consolidated net sales by product 2009 Q3 Change at Change on a Change on a net sales constant reported constant exchange basis structure basis rates and at constant Millions of euros exchange rates ------------------ --------- --------- ----------- --------------- Lovenox(R) 747 13.7% 17.6% 13.7% ------------------ --------- --------- ----------- --------------- Lantus(R) 778 21.7% 27.1% 21.7% ------------------ --------- --------- ----------- --------------- Plavix(R) 664 4.1% 5.6% 4.1% ------------------ --------- --------- ----------- --------------- Taxotere(R) 526 1.4% 4.2% 1.4% ------------------ --------- --------- ----------- --------------- Eloxatin(R) 193 -44.3% -40.6% -44.3% ------------------ --------- --------- ----------- --------------- Aprovel(R) 299 1.7% 0.3% 1.7% ------------------ --------- --------- ----------- --------------- Apidra(R) 34 32.0% 36.0% 32.0% ------------------ --------- --------- ----------- --------------- Multaq(R) 13 ------------------ --------- --------- ----------- --------------- Flagship Products 3,254 4.4% 7.4% 4.4% ------------------ --------- --------- ----------- --------------- Stilnox(R)/Ambien(R)/ Ambien CR(R)/Myslee(R) 213 -3.0% 7.0% -3.0% ------------------ --------- --------- ----------- --------------- Allegra(R) 153 5.3% 16.8% 5.3% ------------------ --------- --------- ----------- --------------- Copaxone(R) 118 20.0% 18.0% 20.0% ------------------ --------- --------- ----------- --------------- Tritace(R) 107 -5.1% -8.5% -5.1% ------------------ --------- --------- ----------- --------------- Amaryl(R) 103 5.4% 12.0% 5.4% ------------------ --------- --------- ----------- --------------- Depakine(R) 80 5.1% 13.0% 5.1% ------------------ --------- --------- ----------- --------------- Xatral(R) 72 -7.9% -5.3% -7.9% ------------------ --------- --------- ----------- --------------- Actonel(R) 62 -23.5% -27.1% -9.7% ------------------ --------- --------- ----------- --------------- Nasacort(R) 48 -11.8% -5.9% -11.8% ------------------ --------- --------- ----------- --------------- Other Products 1,486 -4.7% -4.8% -2.0% ------------------ --------- --------- ----------- --------------- OTC 356 26.3% 18.7% 7.4% ------------------ --------- --------- ----------- --------------- Generics 302 273.3% 251.2% 16.3% ------------------ --------- --------- ----------- --------------- Total Pharmaceuticals 6,354 6.2% 7.6% 2.9% ------------------ --------- --------- ----------- --------------- Vaccines 1,046 4.8% 10.5% 4.8% ------------------ --------- --------- ----------- --------------- Total 7,400 6.0% 8.0% 3.2% ------------------ --------- --------- ----------- --------------- 2009 Change at Change on a Change on a 9-month constant reported constant net sales exchange basis structure basis rates and at constant Millions of euros exchange rates ------------------ --------- --------- ----------- --------------- Lovenox(R) 2,289 9.1% 15.1% 9.1% ------------------ --------- --------- ----------- --------------- Lantus(R) 2,317 24.9% 32.8% 24.9% ------------------ --------- --------- ----------- --------------- Plavix(R) 2,053 4.1% 5.2% 4.1% ------------------ --------- --------- ----------- --------------- Taxotere(R) 1,644 6.8% 10.2% 6.8% ------------------ --------- --------- ----------- --------------- Eloxatin(R) 890 -18.4% -10.2% -18.4% ------------------ --------- --------- ----------- --------------- Aprovel(R) 919 3.9% 2.3% 3.9% ------------------ --------- --------- ----------- --------------- Apidra(R) 100 42.6% 47.1% 42.6% ------------------ --------- --------- ----------- --------------- Multaq(R) 13 ------------------ --------- --------- ----------- --------------- Flagship Products 10,255 7.6% 11.9% 7.6% ------------------ --------- --------- ----------- --------------- Stilnox(R)/Ambien(R)/ Ambien CR(R)/Myslee(R) 660 -2.0% 10.6% -2.0% ------------------ --------- --------- ----------- --------------- Allegra(R) 591 2.2% 19.4% 2.2% ------------------ --------- --------- ----------- --------------- Copaxone(R) 349 -31.7% -32.9% 22.0% ------------------ --------- --------- ----------- --------------- Tritace(R) 328 -10.3% -13.7% -10.3% ------------------ --------- --------- ----------- --------------- Amaryl(R) 310 3.6% 12.7% 3.6% ------------------ --------- --------- ----------- --------------- Depakine(R) 245 7.6% 2.9% 7.6% ------------------ --------- --------- ----------- --------------- Xatral(R) 225 -9.7% -5.5% -9.7% ------------------ --------- --------- ----------- --------------- Actonel(R) 199 -15.8% -19.4% -5.9% ------------------ --------- --------- ----------- --------------- Nasacort(R) 168 -14.4% -7.2% -14.4% ------------------ --------- --------- ----------- --------------- Other Products 4,585 -6.5% -6.0% -3.8% ------------------ --------- --------- ----------- --------------- OTC 996 19.6% 12.3% 4.5% ------------------ --------- --------- ----------- --------------- Generics 679 177.5% 163.2% 12.1% ------------------ --------- --------- ----------- --------------- Total Pharmaceuticals 19,560 4.0% 6.7% 3.4% ------------------ --------- --------- ----------- --------------- Vaccines 2,385 4.2% 10.8% 4.2% ------------------ --------- --------- ----------- --------------- Total 21,945 4.1% 7.2% 3.5% ------------------ --------- --------- ----------- --------------- Appendix 2: 2009 third-quarter and 9-month consolidated net sales by geographic region and product Pharmaceuticals Europe Change at United Change at Other Change at constant States constant Countries constant 2009 Q3 net sales exchange exchange exchange (euro million) rates rates rates ----------------- ------ --------- ------ --------- -------- --------- Lovenox(
Posted: October 2009
